The Acrodea Group is engaged in middleware and media business operations under the following corporate philosophy: To supply middleware globally for the operation of smooth user interfaces (UI) intuitive to the user, and thus to promote deeper and more fulfilling human communications around the world.
The advances in data communication devices—such as mobile phones, television sets, and automotive navigation systems that enhance our modern lifestyle—are remarkable. The sophistication and diversification provided by recent features, however, although nothing short of astonishing, are imposing increasing complexity on the operations of these devices. Reflecting on this situation, the Acrodea Group feels the need to emphasize operability by granting the preferences and manner of use sought by numerous types of users, so that contact with such devices is straightforward and undemanding.
Necessity induces the evolution of technology, and the data communication devices in our lives have accordingly supplied us with one new service after another. Precisely because we must now contend with the all-in-one utility of these devices, the Acrodea Group believes it is necessary to think seriously about how to advance the ease of use for services where people and machines intersect and how to actually introduce truly needed services. Consequently, we are envisioning a society where the end user (who is also the end client) can interact readily with electronic devices without feeling any stress—without concern for functions residing deep inside and out of view.

Consulting, Contract Development, and Proprietary Product Development (Licensing) constitute the three segments of the Middleware Business.

Consulting

This business segment supports software conceptualization, design, and distribution for client mobile carriers, handset manufacturers, and middleware vendors on a consulting basis. The consulting business provides a conduit to identify client requirements, and a means to improve product development.

Contract Development

This business segment is engaged in the development and distribution of software principally for mobile phones on a contract basis from mobile carriers, handset manufacturers, and middleware vendors. The contract work mainly involves prototyping of Acrodea products and actual product implementation to mobile phones after license sales that tie into the development business for proprietary products.

Proprietary Product Development (Licensing)

This business segment conducts research and development of technologies that form the foundation of software for compact embedded devices, such as mobile phones, and licensed sales of Acrodea middleware to carriers and manufacturers. Acrodea considers this segment to be of paramount importance as the principal revenue stream.
Our proprietary products constitute a portfolio of 14, including VIVID UI, as of March 31, 2008.

The Media Business conducts operations and content development support for mobile websites.

The E-Commerce Business is engaged in e-commerce fulfillment services that deploy EXREGZIO, a backyard solution for e-commerce operators that provides an enterprise system for product purchase settlement, issuance and receipt of orders, and delivery; and that also covers warehousing operations for the storage and management of product inventory.

The Middleware Business represents the main pillar of revenues for the Acrodea Group, and comprises licensed distribution of proprietarily developed middleware. In the process of finalizing licensed distribution, Acrodea typically performs consulting and prototyping on a contracted development basis for the client, typically a carrier or manufacturer. After purchasing a license, the client may engage Acrodea according to its deployment needs of the middleware to terminals, and for customization and support, which variously constitute secondary contracted development. The primary revenue model consists of royalties based on terminal units sold, although certain products earn revenues on a revenue-sharing model, based on the level of service used or the number of users.

Wholly owned subsidiary AMS presides over the Media Business, which is engaged in developmental support and contracted operations for content providers. Revenues are generated as a share from payments for content downloads. Support for content hosted on official mobile websites is a further source of business revenue.

The EC (E-Commerce) Business generates revenues as a share of revenue from sales by e-commerce sellers who deploy EXREGZIO, the EC back-office system developed by AMS, to their EC fulfillment service. Future plans call for linking EXREGZIO to the Middleware Business’s product portfolio and improving convenience for further activation of the EC business.

In this way, the businesses and operations of the Acrodea Group are not stand-alone units, but are mutually linked to the Middleware Business’s core licensed distribution effort. Finally, a portion of the products developed by Acrodea adopt the joint development model, where companies who can expect synergy in development and in sales participate as joint development partners, by bearing a portion of development costs and consequently sharing the income from licensed sales, according to the proportion of development costs shouldered. This arrangement lowers business risks associated with development and distribution of products, and can increase the lineup for an attractive, original product portfolio.